Investment Securities

The following tables summarize the amortized costs and estimated fair value of the securities portfolio at

March

31,

2017

and

December

31,

2016.

The summary is divided into available for sale and held to maturity investment securities.

March 31, 2017 (In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	95,120	$	168	$	405	$	94,883
Obligations of states and political subdivisions		130,412		857		1,674		129,595
Mortgage-backed securities – residential		213,588		1,335		2,284		212,639
Mortgage-backed securities – commercial		49,039		1		1,505		47,535
Corporate debt securities		7,627		1		235		7,393
Mutual funds and equity securities		827		38		4		861
Total securities – available for sale	$	496,613	$	2,400	$	6,107	$	492,906
Held To Maturity
Obligations of states and political subdivisions	$	3,475	$	125	$	-	$	3,600

December 31, 2016 (In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available For Sale
Obligations of U.S. government-sponsored entities	$	71,941	$	213	$	460	$	71,694
Obligations of states and political subdivisions		134,055		773		2,536		132,292
Mortgage-backed securities – residential		225,489		1,505		2,687		224,307
Mortgage-backed securities – commercial		47,164		6		1,557		45,613
Corporate debt securities		6,565		1		441		6,125
Mutual funds and equity securities		824		20		11		833
Total securities – available for sale	$	486,038	$	2,518	$	7,692	$	480,864
Held To Maturity
Obligations of states and political subdivisions	$	3,488	$	109	$	-	$	3,597

The amortized cost and estimated fair value of the debt securities portfolio at

March

31,

2017,

by contractual maturity, are detailed below. The summary is divided into available for sale and held to maturity securities. Expected maturities

may

differ from contractual maturities because borrowers

may

have the right to call or prepay obligations with or without call or prepayment penalties. Mutual funds and equity securities in the available for sale portfolio consist of investments attributed to the Company’s captive insurance subsidiary. These securities have no stated maturity and are not included in the maturity schedule that follows.

Mortgage-backed securities are stated separately due to the nature of payment and prepayment characteristics of these securities, as principal is not due at a single date.

	Available For Sale				Held To Maturity
	Amortized		Estimated		Amortized		Estimated
March 31, 2017 (In thousands)	Cost		Fair Value		Cost		Fair Value
Due in one year or less	$	46,954	$	46,994	$	-	$	-
Due after one year through five years		84,708		84,923		-		-
Due after five years through ten years		80,396		79,302		570		621
Due after ten years		21,101		20,652		2,905		2,979
Mortgage-backed securities		262,627		260,174		-		-
Total	$	495,786	$	492,045	$	3,475	$	3,600

Gross realized gains and losses on the sale of available for sale investment securities were as follows:

	Three Months Ended
	March 31 ,
(In thousands)	2017			2016

Gross realized gains	$	-		$	162
Gross realized losses		9			79
Net realized (loss) gain	$	(9	)	$	83

Investment securities with unrealized losses at

March

31,

2017

and

December

31,

2016

not recognized in income are presented in the tables below. The tables segregate investment securities that have been in a continuous unrealized loss position for less than

twelve

months from those that have been in a continuous unrealized loss position for

twelve

months or more. The tables also include the fair value of the related securities.

	Less than 12 Months				12 Months or More				Total
March 31, 2017 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	49,292	$	405	$	-	$	-	$	49,292	$	405
Obligations of states and political subdivisions		73,875		1,666		1,650		8		75,525		1,674
Mortgage-backed securities – residential		152,605		2,078		5,522		206		158,127		2,284
Mortgage-backed securities – commercial		46,319		1,505		-		-		46,319		1,505
Corporate debt securities		1,563		4		5,688		231		7,251		235
Mutual funds and equity securities		-		-		248		4		248		4
Total	$	323,654	$	5,658	$	13,108	$	449	$	336,762	$	6,107

	Less than 12 Months						12 Months or More		Total
December 31, 2016 (In thousands)	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Obligations of U.S. government-sponsored entities	$	51,657	$	460	$	-	$	-	$	51,657	$	460
Obligations of states and political subdivisions		91,728		2,526		1,999		10		93,727		2,536
Mortgage-backed securities – residential		154,397		2,485		5,841		202		160,238		2,687
Mortgage-backed securities – commercial		43,309		1,557		-		-		43,309		1,557
Corporate debt securities		536		6		5,476		435		6,012		441
Mutual funds and equity securities		128		2		113		9		241		11
Total	$	341,755	$	7,036	$	13,429	$	656	$	355,184	$	7,692

Unrealized losses included in the tables above have not been recognized in income since they have been identified as temporary. The Company evaluates investment securities for other-than-temporary impairment (“OTTI”) at least quarterly, and more frequently when economic or market conditions warrant. Many factors are considered, including:

(1)

the length of time and the extent to which the fair value has been less than cost, (

the financial condition and near-term prospects of the issuer, (

whether the market decline was effected by macroeconomic conditions, and (

whether the Company has the intent to sell the security or more likely than not will be required to sell the security before its anticipated recovery. The assessment of whether an OTTI charge exists involves a high degree of subjectivity and judgment and is based on the information available to the Company at a point in time.

Corporate debt securities in the Company’s investment securities portfolio at

March

31,

2017

include single-issuer trust preferred capital securities with an unrealized loss of

$231

thousand and a carrying value of

$5.7

million. At year-end

2016,

these securities had an unrealized loss of

$435

thousand. These securities were issued by a national and global financial services firm and were purchased by the Company during

2007.

The securities are currently performing and continue to be rated as investment grade by major rating agencies. The Company believes these securities are not impaired due to reasons of credit quality or other factors, but rather the unrealized loss is primarily attributed to continuing uncertainties in both international and domestic economies and market volatility. The Company believes that it will collect all amounts due according to the contractual terms of these securities and that the fair values of these securities will recover as they approach their maturity dates.

The Company attributes the unrealized losses in other sectors of its investment securities portfolio to changes in market interest rates and volatility. Investment securities with unrealized losses at

March

31,

2017

are performing according to their contractual terms, and the Company does not expect to incur a loss on these securities unless they are sold prior to maturity. The Company does not have the intent to sell these securities nor does it believe it is likely that it will be required to sell these securities prior to their anticipated recovery. The Company does not consider any of the securities to be impaired due to reasons of credit quality or other factors.